Renting a Property

DITTRICH

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Never mix business and your friends.
It can all end in tears.
Under the circumstances, I would recommend an Agent.
You might think that you have all the angles covered but you aren't experienced.
Okay, you lose maybe 15% of the gross, but they collect the money and deal with the problems.
That 15% isn't really 15% as it reduces your tax liability too.
I have rented property when I worked overseas. I have an agent who attends to the administration. In around 20 years of renting I have had 1 bad tenant and most of the costs were recouped from the deposit.
The risks are yours to mitigate and you may feel comfortable with doing it yourself, but your inexperience with letting property makes those risks higher.
 

Beetnik

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I don't use an agent as I'm local and can check up but, if you're going abroad, I'd recommend using one. As part of the fee he'll call in at the property from time to time to ensure everything's OK.

I recall doing a repossession many years ago (fortunately not my property) where no inspections had been made until the arrears reached a certain level and when we called round we found an empty property with everything stripped out, including the floorboards. All that was left in the property was a ladder - yes the staircase had gone too. Property went to auction and the owner was left nursing a massive loss.
 

A-AvantGarde

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Never mix business and your friends.
It can all end in tears.
Under the circumstances, I would recommend an Agent.
You might think that you have all the angles covered but you aren't experienced.
Okay, you lose maybe 15% of the gross, but they collect the money and deal with the problems.
That 15% isn't really 15% as it reduces your tax liability too.
I have rented property when I worked overseas. I have an agent who attends to the administration. In around 20 years of renting I have had 1 bad tenant and most of the costs were recouped from the deposit.
The risks are yours to mitigate and you may feel comfortable with doing it yourself, but your inexperience with letting property makes those risks higher.
+1 some great advice there. Using an agent keeps the professional distance, also the fees / charges are offset against tax too. The only thing to watch is most agents will take their fee upfront as opposed to a percentage each month.
 

developer

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Rental income will be shown on your tax return as income from property and you'll be taxed at your particular rate after it's added.

Allowable expenses are detailed in IR150, and there will be a summary somewhwere on directgov.co.uk.

Good tenant - easy life.
Bad tenant - miserable life so choose carefully.

Don't forget, the law states that the only way you can remove a tenant is through the courts, generally with a section 21 which includes an 8 week notice period, served at exactly the right time.

Renting "casually" to friends might sound ok, but in the event of a problem, you're buggered, particularly if you've decided not to declare the income or tell your mortgage/insurance company. You are your tenant's mercy.

I don't use an agent, but as mentioned, I'm not overseas.

Interestingly, there was mention of an agent popping in to keep an eye on things - if the tenant refuses access (assuming things have gone wrong) the agent can't enter, even with written permission, and neither can you. It's a funny old game, this renting.
 
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rizzer

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We have rented to friends and it has never been a problem but still always use our agent, it just keeps things very clear on both sides and more formal. However we always manage our own properties as all are local and its easier to keep an eye on. Agents fees do seem high but it does reduce the risk of ending up with a bad tenant.
 

martin_a

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We have rented to friends and it has never been a problem but still always use our agent, it just keeps things very clear on both sides and more formal. However we always manage our own properties as all are local and its easier to keep an eye on. Agents fees do seem high but it does reduce the risk of ending up with a bad tenant.

Eh?

You manage the property but still let to friends through an agent? So the agent has er... taken references for friends of yours to make sure your friends aren't idiots?

Not sure i'm getting this one!

m.
 

rizzer

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I didnt say or suggest about friends being idiots. Do you know everything, particularly finances, about your friends. We feel it works for us and reduces risk. If its not for you then thats fine. All I was doing was saying how we do things, its up to others if its of any use or not. It also depends how you define "friends".
 

Piff

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I haven't used agents for years after the agent cocked up and got us a dodgy tenant who they had failled to correctly check out
Even with the agent, I did my own maintenance. The agents fee was 10%.
Since sacking the agent I've judged tenants myself, usually only get two or three replies to each advert and then select which I believe will be the best bet.
Have had a couple of bad ones, but mostly good.
 

Morecambenz

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I've rented property out for years and all I'd recommend is CAUTION. Much, much better to have an empty house than a bad tenant, as the saying goes.
And one piece of advise - Never let it out to a middle aged bloke who has left his wife for a piece of young 'totty'. It will end in tears - first his then metaphorically yours, had my fingers burnt with this one - ouch!
 

martin_a

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I didnt say or suggest about friends being idiots. Do you know everything, particularly finances, about your friends. We feel it works for us and reduces risk. If its not for you then thats fine. All I was doing was saying how we do things, its up to others if its of any use or not. It also depends how you define "friends".

calm down the post just didn't make sense is all.

you do of course realise that the majority of agents, should a tenent not pay will simply say "their references checked out"?

Essentially, they should find you a good one and if they do, they'll take 15% of the rent. If they don't provide a good tenent they offer no come back at all.

Piff is on the right lines here.

m.
 

Burger

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As someone currently renting I find these discussions interesting and I would urge caution in the choice of tenant. I believe I'm a good tenant as I treat any property as though it were my own, and in my case at least, that means I look after it - The house and the garden. In the current house however, I'm still repairing damage and fixing the complete neglect of many previous tenants. If this were my house, I would be horrified at just how much it's been neglected. It seems to me the majority of tenants must have the same attitude as many company car drivers... it's not mine so it doesn't matter how I treat it.

Regards,
 

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